Cimatron Limited (NASDAQ and TASE: CIMT) today announced that its Board of Directors has approved, subject to Israeli court approval, the distribution to Cimatron shareholders of up to US$10 million. The distribution may be effected over the course of a 12 month period following the approval of the court, subject to subsequent Board approval of specific payments out of the total potential distribution amount, and subject to certain approvals from the Israeli Tax Authority that the company intends to seek.
Under Israeli law, a company such as Cimatron with practically no distributable earnings (within the meaning of such term under Israeli law) is required to obtain approval from the court for a cash distribution to its shareholders, which can instead be made from additional paid-in capital. The company intends to shortly file an application with the Israeli court for the requisite approval. There is no guarantee that the court will approve the distribution on the terms requested by Cimatron, or at all.
Cimatron also intends to seek certain approvals from the Israeli Tax Authority prior to commencing any actual distribution. Prior to any specific distribution, Cimatron will issue a press release announcing the exact distribution amount, record date and distribution date.
"Our steady cash flows from operations, as well as free cash flows, make a cash distribution from our additional paid-in capital a good vehicle to unlock value to our shareholders." remarked Yossi Ben-Shalom, Cimatron's Chairman of the Board of Directors. "We hope to obtain the necessary approvals and commence distribution as soon as practicable."
Nov 29, 2011
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